The British Pound £ (GBP)

official currency of the United Kingdom

One pound is divided into 100 pence, the singular of which is "penny". The symbol for the penny is "p"; hence an amount such as 50p (£0.50) is usually pronounced "fifty pee" rather than "fifty pence".

Prior to decimalisation in 1971, each pound was divided into twenty shillings, with a shilling equal to 12 pence. The symbol for the shilling was "s" — not from the first letter of the word, but rather from the Latin word solidus. The symbol for the penny was "d", from the French word denier (sum of money), which in turn was from the Latin word denarius.

After Decimal Day, the value of one penny was therefore different from its pre-decimalisation value. For the first few years after 71, the new type of penny was commonly referred to as a new penny. Coins for denominations of ½p, 1p, 2p, 5p, 10p and 50p all bore the name New Pence. The half pence was dropped in1984. The British decimal Twenty Pence (20p) coin was issued in June 1982 to fill in the obvious gap between the Ten Pence and Fifty Pence coins; it rapidly gained acceptance. The one pound coin was introduced in 1983 to replace the Bank of England One Pound note. The two pound coin was introduced in 1998 (dated 1997). Although it has been issued from 86 - 96 as a commemorative coin. Twenty-Five Pence and Five Pounds have been issued as commemorative coins.

The £ & Rarely the L is used. Both symbols derive from libra, the Latin word for "pound".

Pound sterling was used as the currency of the British Empire. As this became the Commonwealth of Nations, dominions introduced their own currencies (such as the Australian pound and Irish pound) — first pegged to sterling, and later breaking parity (Australia in 1931 and Ireland in 1979).

Bankotes issues in UK £5, £10, £20, £50

Forex History issues

Sterling unofficially moved to the gold standard from silver thanks to an overvaluation of gold in England that drew gold from abroad and occasioned a steady export of silver coin, in spite of a re-evaluation of gold in 1717 by Sir Isaac Newton, Master of the Royal Mint.

In common with all other world currencies, there is no longer any link to precious metals. The U.S. dollar was the last to leave gold, in 1971. The pound was made fully convertible in 1946 as a condition for receiving a U.S. loan of US$3.75 billion in the aftermath of World War II.

Since leaving gold, there have been several attempts to peg the value of the pound to other currencies, initially the U.S. dollar.

Under continuing economic pressure, and despite months of denials that it would do so, on September 19, 1949, the government devalued the pound by 30%, from US$4.03 to US$2.80. pound was eventually devalued by 14.3% to US$2.41 in November 1967.

With the break down of the Bretton Woods system — not least because British currency dealers created a substantial Eurodollar market — the pound was floated in the early 1970s and so subject to a market valuation.

From 23 June 1972 the Chancellor Mr Barber floated the £ and told MPs the trade balance had deteriorated in the past couple of months and it had become necessary to shore up sterling by using the Bank of England's reserves. The Chancellor went to Luxembourg on 26 June to explain his decision to float the pound to the finance ministers of the six Common Market countries.
He assured them the pound would return to operating within fixed trading bands in time for Britain to join its European partners in 1973.

In 1998 the conservative government decided to shadow the West German currency. In 1990 the government joined the ERM (European Exchange Rate) Mechanism , with the pound set at DM 2.95. However, the country was forced to withdraw from the system on Black Wednesday (September 16, 1992) as the exchange rate became unsustainable. Speculator George Soros made US$1 billion from shorting the pound. Ultimately proponents of a lower GBP/DM exchange rate were vindicated as the cheaper pound encouraged exports and contributed to the economic prosperity of the 1990s. In the mid to late nineties the £ rose in value and many claimed the decline in the British export industry was due to the high exchange rate difference with the Euro and the pound.

Gibraltar and the islands of Guernsey, Jersey, Saint Helena, the Falkland Islands and the Isle of Man, which are not part of the UK, also issue their own currencies, which are fixed to the value of sterling.

http://www.bankofengland.co.uk/ Bank of England - (Should be Bank of Britain): known as "The Old Lady of Threadneedle Street" The Bank of England is the central bank of the United Kingdom. Sometimes known as the 'Old Lady' of Threadneedle Street, the Bank was founded in 1694, nationalised on 1 March 1946, and gained independence in 1997. Standing at the centre of the UK's financial system, the Bank is committed to promoting and maintaining monetary and financial stability as its contribution to a healthy economy.

On behalf of HM Treasury, the Bank of England manages the Exchange Equalisation Account, which holds the UK’s gold and foreign exchange reserves. As part of this role, it manages the issuance of foreign currency debt and has also recently carried out a series of gold auctions. Subject to policy objectives, these reserves may be used to attempt to influence the exchange rate.

One of the Bank of England's two core purposes is monetary stability. Monetary stability means stable prices - low inflation - and confidence in the currency. Stable prices are defined by the Government's inflation target, which the Bank seeks to meet through the decisions on interest rates taken by the Monetary Policy Committee. The Monetary Policy Committee sets the Bank of England's official rate, the main instrument of monetary policy. The Bank implements this rate through its framework for operations in the sterling money markets.

The Bank deals in the foreign exchange market as part of its day-to-day management of the "Exchange Equalisation Account" - which holds the UK's foreign currency and gold reserves. These may be used, subject to policy objectives, to attempt to influence the exchange rate in case of need. The Bank also operates in the foreign exchange market on its own behalf, and acting on behalf of customers.

The Bank of England has been issuing banknotes for over 300 years. During that time, both the notes themselves and their role in society have undergone continual change. From today’s perspective, it is easy to accept that a piece of paper that costs a few pence to produce is worth five, ten, twenty or fifty pounds. Gaining and maintaining public confidence in the currency or, to put it another way, preserving its value and integrity, is a key role of the Bank of England and one which is essential to the proper functioning of the economy. Other banks in the UK that issue banknotes include the Royal Bank of Scotland, the Bank of Scotland, Clydesdale, the Bank of Ireland, First Trust, Northern Bank and Ulster Bank.

http://www.hm-treasury.gov.uk/ HM Treasury: The United Kingdom's economics and finance ministry.

The Correspondence & Enquiry Unit
2/W1
HM Treasury
1 Horse Guards Road
London
SW1A 2HQ

http://www.fsa.gov.uk/ Financial Services Authority: An independent body that regulates the financial services industry in the UK.

25 The North Colonnade,
Canary Wharf,
London E14 5HS

http://www.royalmint.com Royal Mint: Responsible for the provision of the United Kingdom coinage.

British Royal Mint
Coin Club
PO Box 500
Pontyclun
CF1 1HA

Foreign terms for Pound

Spain = Libra esterlina

Portugal = Libra esterlina

German = Pfund

Esperanto = Brita pundo
Dutch = Brits pond, of kortweg pond (Brits pond, of kortweg pond)

Finland = punta

Lira sterlina = Romania

An Index of web pages on the subject of Shares, Stocks, FOREX and Finance